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Stepan Company (SCL)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$20.37 - $32.23$25.79
Multi-Stage$27.95 - $30.52$29.21
Blended Fair Value$27.50
Current Price$47.70
Upside-42.35%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.01%8.24%1.481.441.341.231.111.010.910.830.760.71
YoY Growth--3.29%7.51%8.87%10.54%9.99%10.74%10.31%9.11%6.31%5.93%
Dividend Yield--2.69%1.62%1.30%1.24%0.87%1.14%1.03%0.99%0.96%1.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)45.24
(-) Cash Dividends Paid (M)34.76
(=) Cash Retained (M)10.49
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)9.055.663.39
Cash Retained (M)10.4910.4910.49
(-) Cash Required (M)-9.05-5.66-3.39
(=) Excess Retained (M)1.444.837.09
(/) Shares Outstanding (M)22.8922.8922.89
(=) Excess Retained per Share0.060.210.31
LTM Dividend per Share1.521.521.52
(+) Excess Retained per Share0.060.210.31
(=) Adjusted Dividend1.581.731.83
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.24%2.24%3.24%
Fair Value$20.37$25.79$32.23
Upside / Downside-57.29%-45.94%-32.43%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)45.2446.2647.2948.3549.4450.5552.06
Payout Ratio76.82%79.46%82.09%84.73%87.36%90.00%92.50%
Projected Dividends (M)34.7636.7538.8240.9743.1945.4948.16

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.24%2.24%3.24%
Year 1 PV (M)33.3633.6934.02
Year 2 PV (M)31.9832.6233.26
Year 3 PV (M)30.6331.5532.49
Year 4 PV (M)29.3130.4931.70
Year 5 PV (M)28.0229.4330.90
PV of Terminal Value (M)486.47510.97536.45
Equity Value (M)639.78668.75698.82
Shares Outstanding (M)22.8922.8922.89
Fair Value$27.95$29.21$30.52
Upside / Downside-41.41%-38.76%-36.01%

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